Article Archives: California

The Corporation for Supportive Housing–Los Angeles: A Fund for Stalled Real Estate

The Corporation for Supportive Housing–Los Angeles (CSHLA) is an affiliate of the Corporation for Supportive Housing (CSH). CSH is a community development financial institution with a mission to provide permanent housing, with support services, to prevent and end homelessness (see “Corporation for Supportive Housing: Helping the Homeless Live With Dignity” in the February 2012 edition of Community Developments Investments). CSH views permanent housing as the most viable means of eliminating homelessness. Affiliates have access to funding for programs from the national organization.

The Los Angeles program has been successful during the last several years with the establishment of three loan funds and the creation of 500 units of supportive housing and 200 units of affordable housing. The most recently established fund, the Los Angeles Supportive Housing Recovery Initiative, has four partners, including the Los Angeles Community Redevelopment Agency, and is targeted at projects that have been stalled as a result of the real estate collapse and reductions in public funding resources. It has been used to reinvigorate more than $8 million in loans for multifamily supportive housing developments and is a model for reviving a frozen market. The fund, however, still needs more investors.

For more information regarding the fund and other CSHLA programs, contact Neil McGuffin, Senior Program Manager, at neil.mcguffin@csh.org.[Published in Community Developments Investments, August 2012]

Community Services Unlimited (CSU) is a community-based nonprofit organization that serves South Central Los Angeles with several programs that promote equitable, healthful, sustainable, and self-reliant communities. One of CSU’s most successful programs is the Village Market Place. Much of South Central Los Angeles is considered to be a “food desert” with limited sources of fresh food and an overabundance of fast-food operations. CSU conducted a community food assessment in 2003 that found that the primary obstacles to healthy food habits in the area are high cost and limited transportation. The organization then set out to implement a distribution program that would provide high-quality food at affordable prices locally. The result of CSU’s efforts is the Village Market Place.

The Village Market Place, which sells and distributes healthy food grown on its urban mini-farms or by local farmers, comprises two Community Farm Stands and the Farm Fresh Produce Bag program. The Produce Bag program provides bags of food at affordable prices to residents and others who subscribe and pay in advance for fresh fruit and vegetables weekly. Subscribers pick up their bags at the Farm Stands or at other designated locations each Thursday.

CSU also provides classes in gardening at its urban farm sites for residents and local schools. In addition, it offers internship programs for local at-risk youth at the secondary and post-secondary levels, providing management and financial education skills along with its core healthy-food curriculum. CSU recently expanded the Village Market Place to two new locations, a county hospital and a large health clinic. The expansion allowed the organization to reach even more residents.

CSU is now soliciting support for the purchase of electronic benefits transfer machines to enable low-income customers to make purchases with Supplemental Nutrition Assistance Program debit cards.

For more information regarding CSU, contact Executive Director Neelam Sharma at neelam@csuinc.org.[Published in Community Developments Investments, August 2012]

San Joaquin Valley Small Business PartnershipWells Fargo Bank, the Fresno Regional Foundation, and the Valley Small Business Development Corporation have entered into a partnership to support economic development and jobs in California’s Central San Joaquin Valley. The partnership provides capital for small businesses and farms in an area that extends north to Sacramento.

Seeking to leverage funding, Wells Fargo provided a $1 million equity-equivalent (EQ2) investment to the Fresno Regional Foundation, an organization in existence since 1966 that provides leadership and a strong balance sheet for philanthropic efforts in the Central Valley. The foundation in turn invested the funds in the Valley Small Business Development Corporation, one of California’s 11 Small Business Financial Development Corporations, to further capitalize its Direct Small Business Loan Program. The program provides loans to small businesses and farms throughout the Central San Joaquin Valley and in Sacramento, Monterey, and eastern Los Angeles counties.

Los Angeles Loan Fund Will Offer Banks Commercial Development OpportunitiesThe Los Angeles Local Development Corporation (LDC), a community development financial institution, is launching a new commercial loan fund to benefit businesses in Los Angeles, Orange, and Ventura counties of California. The 504 ACE Loan Fund II (ACE II) will make loans to businesses and nonprofits qualifying for SBA's 504 program. The $20 million fund is soliciting investments from banks that are recipients of Troubled Asset Relief Program (TARP) funds as well as others. The minimum investment amount is $200,000. The fund is scheduled to close at the end of the first quarter of 2010. Loans made through ACE II will primarily be commercial real estate loans with loan-to-value ratios up to a maximum 80 percent and maturities of 15 years.

The Los Angeles LDC was incorporated in 1995. It is known for its expertise in SBA 504 loans, direct small business loans, commercial real estate loans, and facilities loans to nonprofits. The organization launched the first 504 ACE Loan Fund in 2004, a $10 million fund whose investors included several of the largest financial institutions in Southern California.

Stabilizing Communities Series in California Provides REO InformationThe OCC and the Federal Reserve Bank of San Francisco continued their Stabilizing Communities program series with three meetings in the first quarter of 2009 that focused on the transfer of REO properties and the U.S. Department of Housing and Urban Development's Neighborhood Stabilization Program. More than 200 attended the California meetings that included presentations by bankers and representatives of California's Housing and Community Development Department, Fannie Mae, and other groups involved with residential real estate. Each meeting also included a presentation by the National Community Stabilization Trust on its efforts to work with partners to help communities suffering from high rates of foreclosure. Attendees learned about financing opportunities for organizations seeking to acquire National Stabilization Program properties and for prospective home buyers, and they also learned how banks can support community efforts.

Los Angeles County Housing Innovation FundIn 2006, the Los Angeles County Board of Supervisors allocated $60 million to the Los Angeles County Housing Innovation Fund (LACHIF) as part of the county's Homeless Prevention Initiative. LACHIF's investors include the county, philanthropic organizations, national financial institutions, and nonprofit organizations. The Corporation for Supportive Housing (CSH), a national intermediary that provides permanent affordable housing and flexible supportive services, is the lead administrator for the LACHIF. In June 2008, in order to allow smaller banks to participate in the program, LACHIF set aside a portion of the funds with a reduced minimum investment of $250,000. The investments mature in 10 years and yield two percent.

CSH and Wells Fargo (an investor in the fund) are providing underwriting, documentation, and reporting to participating financial institutions. CSH will underwrite acquisition and predevelopment loans for supportive housing projects using the monies in the fund. Although the first fund has closed, other funds will be considered in the future. E-mail Ruth Teague of CSH for more information.[Community Developments Investments, Spring 2009]

Small Loans, Big ReturnsWays to Work (WtW) is a nonprofit, community development financial institution that helps lower-income people. WtW is designed to help borrowers attain financial independence and advance economically by having money to purchase dependable used cars to get to work or school. Since 1996, WtW has originated nearly 12,000 loans for more than $31 million and the average auto loan amounts to an average $3,400. Results of a 2006 WtW evaluation indicate that borrowers reported an average increase of 41 percent in their take-home pay. In addition, 67 percent of WtW borrowers report that they have used conventional financial services subsequent to receiving their WtW loans.

WtW offices are located in social service agencies affiliated with the Alliance of Children and Families (ACF). ACF agencies screen and provide financial education to borrowers and service the loans. WtW local offices provide financial education to more than three persons for every individual who receives a loan. Investors in WtW include several national foundations, the Community Development Financial Institution Fund of the U.S. Treasury Department, local United Way offices, and financial institutions. Banks can be involved by investing in the national WtW loan fund, by referring to local WtW offices prospective borrowers who do not meet conventional credit criteria, by participating in local WtW loan committees, and by providing grants and in-kind donations to WtW.

Century HousingCentury Housing has provided affordable housing financing, technical assistance, and residential supportive services in Southern California for more than 25 years. Originally established by a 1979 consent decree as part of the I-105 (Century) Freeway, the Century Freeway

Housing Program supported the financing and construction of more than 3,700 homes. In 1995, the organization was privatized and became Century Housing. It expanded its services to provide other life-enriching programs for project residents, including job training, homeless services, seniors and wellness programs, and tutorial services. Century Housing has participated in the creation of more than 12,000 units and $330 million in financing for low- and moderate-income (LMI) persons and families.

Century has spurred development by creating and administering loan pools both directly and through Century Community Development (CCDI), its CDFI subsidiary. Century’s loan pools have generated more than $125 million in financing for 49 projects in Los Angeles and Orange counties. Investors have included financial institutions and foundations.

Century Community Lending Company (CCLC) is another subsidiary of Century Housing. It is a $50 million fund that closed in 2006. It provides rehab/construction loans to small project (2-12 units) owners and developers. The fund is modeled on New York’s Community Preservation Corporation Fund. It is a “one stop shop” for affordable housing developers and owners.

CCDI closed its first $15 million loan pool, the Century Community Development Investment Fund, in 2005, with 18 small and midsized banks participating. Its second fund is scheduled to close later this year.

Century has a goal of reaching $200 million in investment commitments in its funds within the next few years.

For more information, call Stephen Peelor at (310) 642-2034 or visit Century Housing

Community Developments

California Community Reinvestment Initiative (CCRI)CCRI is a training and capacity building initiative sponsored by the County of San Bernadino and several financial institutions in southern California. Its goal is to assist communities in identifying and developing solutions to urban and rural housing and economic development challenges. San Bernadino is one of the fastest growing counties in the country and experienced a 31 percent increase in single-family home prices over the last year. The county saw a need for more comprehensive community development planning in its communities, and sought a different perspective on the process. The California Community Economic Development Association (CCEDA), a statewide training association with experience in California and Nevada, is providing the training and technical assistance. The sessions include: (1) a community analysis (understanding how a community fits into the context of a larger market); (2) strategies of intervention (mitigating the impact of soft markets); and (3) a strategic plan that will enable communities to mobilize resources and stabilize or turn themselves around.

Information regarding the sessions is available from Delores Armstead of the County of San Bernardino at darmstead@ecd.sbcounty.gov.[Published in News from the Districts, Community Developments, Spring 2006]

California Organized Investment NetworkIn 1996, California Organized Investment Network (COIN) was incorporated to stimulate capital investing by California's insurance industry. By investing in economic development and affordable housing projects and programs, the state's low-and moderate-income (LMI) urban and rural communities would benefit. Originally established as a three-year pilot program, COIN has become a permanent operation with a staff of three, soliciting and analyzing investment opportunities throughout the state. Since 1997, over $1.3 billion has been invested in 635 COIN qualified community development investments. Investments are made on a direct or indirect basis (through intermediaries), and run the gamut of CRA and community development qualifying investments. The organization regularly identifies opportunities in its Investment Bulletins and reports on new investment opportunities . COIN also runs its own community development financial institutions (CDFI) program, certifying community development programs and projects around the state. Two popular programs stand out among the opportunities identified by COIN. First are the deposits or equity investments in California's community development banks and credit unions. COIN recommends that the investments be made in federally insured financial institutions but does not make any recommendations relating to interest rates. Each institution negotiates with depositors on rates, varying from 0 percent to market rate. The second well-known opportunity is the COIN CDFI Premium Tax Credit Program. COIN has received an annual allocation of $10 million from the state budget. An insurer or other financial institution may make an investment (minimum $50,000) into a COIN-certified CDFI and receive a 20 percent tax credit based on an investment maturity of at least five years. Many of California's insurers and banks of all asset sizes have participated in both programs over the last seven years.

For more information on COIN, please visit its Web site at www.insurance.ca.gov/COIN. Delores McKinnon, the organization's director, may be reached at McKinnonD@insurance.ca.gov.[Published in News from the Districts, Community Developments, Summer 2005]

San Diego Capital CollaborativeThe nonprofit San Diego Capital Collaborative (SDCC) is an equity capital investment fund that facilitates public and private investment in low- and moderate-income areas of San Diego City and County. Investments will receive funding from partnerships between banks, insurance companies, and pension funds. The organization has a board of directors that includes representatives from San Diego's corporate and community development communities who have experience in urban revitalization and development. The SDCC's first investment opportunity is a for-profit Smart Growth Fund (SGF) intended to raise $60 million. The fund is intended to provide multifamily and single family housing in low- and moderate-income areas. SGF is scheduled to close in late 2004 with full funding from private sector capital.

Those interested in the fund may obtain more information by contacting Barry Shultz at (619) 985-1720; Shultz@capitalcollaborative.com; www.capitalcollaborative.com.[Published in News from the Districts, Community Developments, Winter 2005]

Yurok Indian Tribe Reaches Out to Financial InstitutionsIn an effort to spur partnerships and conventional lending on the Yurok reservation in northern California, the tribe's Housing Authority now holds title to all land for affordable housing development (and associated community facilities) on the reservation in fee simple. This removes a long-time barrier to conventional financing because the land is not held in trust and thus may be used for collateral for loans. The Yurok Tribe, with about 4300 members, is the largest federally recognized tribe in California.

For more information, please contact Judith Marasco, Executive Director of the Yurok Tribal Housing Authority at (707) 482-1506.[Published in News from the Districts, Community Developments, Fall 2002]